Game Changer? Why Marketers are Embracing Native Ads

It’s no secret that advertisers are embracing native advertising to deliver ads that are relevant to the user and blend with the experience of a publisher’s website or mobile app. Social media platforms have led the way with this form of advertising –Facebook, LinkedIn, Instagram, Twitter and Pinterest all have their own native ad products and others are following in their footsteps—New York Times, Tango, AOL. A BIA Kelsey study predicts that social native ad spend will hit $3.1 billion by the end of this year and grow to $5 billion by 2017.

Native advertisements look, feel and work fluidly across mobile and desktop and are viewed within a user’s content stream, such as Facebook’s News Feed. The social network’s Page post ad units are popular because users see them as useful, rather than disruptive. They feature a large creative canvas, act like any other content shared by friends on Facebook, and are combined with the vast number of targeting options Facebook offers based on their unique data. A Nanigans study showed that Facebook’s Page post ads in the News Feed delivered a 26X higher ROI than ads delivered to the right hand side of Facebook.

According to the Interactive Advertising Bureau (IAB), there are six types of ad units commonly used for native advertising, which range from In-feed/Stream Units to Promoted Listings. The advantages of these new native ad formats is that they are delivered to places where audiences are already engaged with and actively looking for content.

In-Feed Ad Units

Over the past year, multiple native ad exchanges have emerged, including MoPub, Sharethrough, Bidtellect, and OpenX. Real-time auctions will help to scale native advertising by maximizing the value for advertisers’ media buys while at the same time generating optimal revenues for the app developers or website publishers that run their ads. Native exchanges work similarly to other real time bidding exchanges, but the inventories bid on are the recognized IAB native ad formats.

Native advertising is poised to be one of the big success stories for both marketers and publishers in 2014. Growing interest in native advertising from brands, coupled with improved ad formats, will fuel the growth of Facebook and Twitter. It’s also expected that other publishers such as LinkedIn, Yahoo and The Wall Street Journal will shift more of their ad inventory to native formats. The biggest opportunity will be in mobile, where feed styled layouts offer the opportunity for native advertising to scale.